Amendment to the Companies (Audit and Auditors) Rules, 2014

By way of notification dated June 22, 2017, the MCA has notified an amendment to Rule 5 of the Companies (Audit and Auditors) Rules, 2014 (‘Audit Rules’). Prior to the amendment, as per Section 139(2) of the Companies Act read with Rule 5, inter alia all private limited companies having a paid up share capital of INR 20 crores (approx. USD 3 million) (or more), were permitted to appoint (i) an individual as the statutory auditor only for a single term of five consecutive years; and (ii) an audit firm as the statutory auditor only for two terms of five consecutive years. Pursuant to the amendment, the limit of INR 20 crores (approx. USD 3 million) (or more) has been increased to INR 50 crores (approx. USD 7.7 million) (or more).

Published In:Inter Alia - Quarterly Edition - July 2017 [ English Chinese japanese ]
Date: July 1, 2017